Core ideas:
Focus on white chicken farming, is expected to usher in the performance inflection point.
The company has established an industrial chain with the core of breeding broilers on behalf of parents, production and sales of commercial broilers, and slaughtering and processing of broilers. The company now keeps 3.2 million sets of broiler breeders for parents, hatches more than 300 million commercial broiler seedlings, produces more than 30 million self-raised broilers, and slaughters and divides more than 70,000 tons of chicken products annually.
As the market picks up, the company's commodity generation chicken business is ready to start.
From January to October in 2022, the company's commodity generation chicken business achieved revenue of 461 million yuan (year-on-year-47.29%) and sales volume of about 224 million feathers (year-on-year-17.60%). This is mainly due to the low market situation of white-feathered broilers and the company's appropriate reduction of production in a short period of time. October and November are the peak season of traditional sales, and the company's chicken seedling output has recovered from the previous month. At present, the company's parents keep about 3.2 million sets of breeder chickens, and the production scale will continue to be expanded in the future. The formation of the supply gap of ancestral chicken is expected to support the price of chicken seedlings in the future.
Vigorously develop chicken products to smooth performance fluctuations.
2022H1's chicken products business achieved revenue of 315 million yuan (year-on-year + 2.12%) and sales of 30400 tons (year-on-year-0.98%). Due to the impact of high raw material prices and low consumption, the company's chicken products business and 2022H1 are in a loss state in 2021. Part of the company's 30,000-ton meat processing project and 30,000-ton cooked food processing project has been put into production, and it is expected that with the gradual release of production capacity in the future, the company's cooked food sector sales are expected to continue to grow.
Profit forecast and investment advice: with the recovery of the White Chicken economy, the company's revenue from the commodity generation chicken sector is expected to achieve high growth, chicken products are expected to improve with the release of production capacity, and the performance of other sectors is growing steadily. It is estimated that in 2022-2024, the company's revenue will be 2.621 billion RMB 2.845 billion yuan, the net profit of its parent will be 5.51 million RMB, and the EPS will be 1.27 won 1.58 RMB respectively, giving the "overweight" rating for the first time.
Risk tips: breeding epidemic risk, product price fluctuation risk, policy risk and so on.